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2011.01 Market Watch

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Monthly Market Watch for Maricopa County An overview of what is happening in the Maricopa County real estate market (using January 2011 statistics) Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Report overview : This report includes MLS data for the past 36 months in Maricopa County only as provided by the FlexMLS system. Please note that searches fluctuate daily when running these reports; these figures were obtained on 2/3/11. A reminder that you need to meet with a real estate professional to see how statistics impact the area where you are considering selling or buying – blended statistics will not be as accurate as a more detailed report that your real estate professional can provide to help you with your decision making. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Distressed Sales Analysis: A bank owned/foreclosure home is one that the seller no longer owns – it has been taken over by the lender(s) who had a note on the home. Short sales are homes where the seller is negotiating with the bank to “forgive” a portion of the debt in order to avoid foreclosure. January statistics saw a slight shift of 2% -- a 2% increase in the number of closed short sales and a 2% decrease in the number of foreclosure homes that closed. The percentage of traditional/non-distressed sales remained the same at 30% of closed sales. Sellers and buyers need to monitor this trend to see how the banks respond in 2011 AND how they treat the shadow inventory that currently exists but has not yet been made available to buyers. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Average Sales Price Analysis Sellers: The month of January showed the lowest average sales price in the 36 month reporting period … a drop to $163,403. This is nearly $21,000 lower than this same month last year. Continue to watch this graph to see how interest rates, inventory, and changing lender requirements impact this price. Buyers: For buyers, this means the average buyer paid LESS for a home in January than in the prior month. However, the increased number of homes that moved to pending status will be a statistic to watch … does this increased activity mean more competition for homes? Increased competition could mean an increase in prices. It is vital that you are consulting with a real estate professional to watch this trend and determine what price is appropriate for a home based on what the seller is asking. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Average Days on Market Analysis Sellers: January saw a decrease of 3 days in this category. This decrease means that the average homes is taking 112 days to close from the time it is shown being under contract. This is the second highest this number has been since July of 2009. Sellers need to watch this trend … the higher the number, the longer it is taking for a home to close. Buyers: Buyers need to be aware of this number because it is an indicator of how long sellers are having to wait to go under contract and close. The higher the number, the more control a buyer normally has. Even if we have an addition of homes to the market via foreclosures, buyers need to understand that competition for great homes continues to remain very high, especially in the lower price ranges. The importance of having a reliable lender AND real estate professional to guide you through this process has never been more important. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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List to Sale Price Ratio Analysis Sellers: The month of January saw an increase of .65% in the list to sales price ratio. In the past 2 years, we have traditionally seen a decrease in the month of January, so this is definitely not following the trend of prior years. This statistic reveals how close the actual sales price was to the list price on a home. Continue to watch this trend, as it will impact how homes should be priced in the current market in order to appeal to the buyers. Buyers: Buyers need to pay attention. This number means that buyers have a little less buying power than they did in the month of December. Although the average is less than 100%, on lower priced/highly desirable properties buyers may still have to pay above list price. Since a home must appraise in order to obtain a loan, underwriters are looking very closely at prices and making sure that homes are selling at or below market value. Make sure your real estate professional helps you understand the competitiveness of the list price of the home you are wanting to purchase. You also need to be aware of the interest and sales activity in the area where you are wanting to buy and how the offer you are making competes with the market AND with any trends relative to the price at which homes are actually selling in the areas you have an interest. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Expired & Cancelled Listings Analysis Sellers: The number of expired and cancelled listings in the month of January decreased 13.9% over the month of December. This means 4,046 homes were removed from the market, meaning buyers had more homes from which to choose than in prior months. Serious sellers need to pay attention to all of the numbers this month … days on the market, the average sales price, and homes expiring from having a market presence due to lack of buyer interest means sellers need to pay very careful attention to how homes are priced so they can be the first choice of buyers. Buyers: For buyers, be aware that there are 4,046 fewer homes to consider. This means buyers will have to be more patient with homes still active AND be prepared to act quickly on available homes. Continue to watch this trend, as this, combined with price, days on market, and list to sales price ratio are an important indicator of what buyers need to do in order to be successful in closing on the home of their dreams. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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INVENTORY OVERVIEW Following is an overview of what is happening with the inventory of homes currently available in Maricopa County and the MLS. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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New Listings Analysis Sellers: As is typical for the month of January, last month saw a dramatic increase of 30.2% in the number of new listings that entered the market. This means there were 10,887 NEW properties available to buyers – they could be traditional sales OR they could be distressed sales. It will be important to watch this statistic to see how sellers introduce new inventory in 2011. Buyers: This is important news for buyers, as it means there are still more homes entering the market, as is normal during this time of year. It is very important that you continue to spend time with and listen to your real estate professional to develop your strategy for succeeding in a market that is constantly changing. Be prepared: as more homes enter the market, there will more options, but there still may be more competition for the best values. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Active Listings Analysis Sellers: The market review for January showed a decrease of 860 homes in active inventory over the month of December. This has been influenced by more homes moving to pending status during last month. Sellers need to make sure that they continue to watch what the banks are doing with foreclosed properties and how they are responding to short sales to ensure that homes are competitive with other homes on the market. Buyers: Buyers still have inventory to preview. Continue to monitor this statistic, as it WILL be the statistic that indicates how much new inventory you will have to preview … the lower the number, the more likely the competitiveness for lower priced homes will remain part of the current market. As always, market activity is local and should be researched with your real estate professional to determine the activity and desirability of the homes that are of interest to you. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Months of Inventory Analysis : (This report has been generated by taking the number of active listings and dividing it by SALES for the past month) Sellers: The months of inventory increased from 5.01 to 6.3 months in January. This means, that on average, we are in what is called a “balanced market” that is identified when this statistic reflects 5 months or more of inventory. This means sellers have a little more competition for buyers. It continues to be very important for you and your real estate professional to monitor this number so that you can make sure your home is priced accordingly in order to become the choice of the buyer pool. Buyers: Buyers will want to seriously monitor this, as it indicates a shift away from a buyers’ market – a balanced market traditionally gives equal control to the sellers and buyers. We are seeing this in many price ranges, however, we are still experiencing significant competition for desirable homes. However, the type of market will vary from price range to price range and even area to area. Work with your real estate professional to make sure you understand the type of market you are in. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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Total Market Overview : Sellers: This report provides a detailed breakdown of homes in Maricopa County based on price … by determining the price range where your home SHOULD sell, you can see what the average list to sales price ratio is, the average days on market, and more importantly, the percentage of homes selling in that price range. Note that as the price increases, so does the days on market AND the list to sales price ratio decreases. You will also see a lower percentage of homes selling as the price increases. Buyers: By reviewing the price range where you are purchasing, you can determine what the average home is selling for vs. list price. This should help you make better and more acceptable offers based on the current market. Provided by Keller Williams Realty Professional Partners – Statistics from January 2011 MLS

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IMPORTANT INFORMATION : Although these reports are beneficial in understanding the general market in Maricopa County, it is essential that you meet with your real estate professional to study these same figures in your area, as statistics will vary from neighborhood to neighborhood. As you make decisions related to the purchase or sale of a home, it is important that you understand how the current real estate trends will impact your decisions. Your real estate professional is available to help you monitor and interpret them to make sure that you are taking advantage of the current market whether you are selling OR buying.